A recent paper by Sara Goldrick-Rab and Nancy Kendall suggests the actual policy goals of federal financial aid might be better met by redirecting it away from private institutions and toward support of two years of free education at state institutions.
The authors argue (among other things) that private institutions are subsidized but actively resist accountability measures to which public institutions are subject and even with current subsidies the privates enroll a very small portion of low resource students (be sure to read pp 24ff).
It is a provocative plan by smart scholars of higher education; ideas like this should engage us both for their social justice implications and for their implications to our institutions’ financial models.
Executive Summary
For almost fifty years, the federal government has tried to make the American Dream universally accessible by using need-based financial aid to lower the price of attending college. The effectiveness of this approach to expanding opportunity and investing in America’s future has diminished because of declines in real family income, increases in demand for college enrollment, poor regulation of state funding and institutional costs, insufficient funding for and targeting of grant aid, and a political movement that places the needs of private businesses and banks over those of students and families. The results have undermined the national ideal of equal opportunity to succeed and equal rewards for hard work. Talented students are forgoing college because of the costs, students who start college are unable to complete because they cannot afford to continue, and even students who finish degrees may not realize all of the expected returns because of sizable debt burdens. All but the wealthiest families must borrow or pay an amount equal to or exceeding one-quarter of their annual income in order to finance attending a public 4-year college or university.
Fortunately, financial aid is not the only way to make college affordable. We argue that it is time for the federal government to partner with states, public colleges and universities, and localities and businesses to offer two years of college for free. This paper outlines a Free Two Year College Option (F2CO) that can be funded with existing resources, developed to overcome the problems in previous efforts to make college more affordable, and designed to ensure that wider access occurs without reductions in educational quality. The effort begins with a simple message to every American interested in pursuing education after high school: If you complete a high school degree, you can obtain a 13th and 14th year of education for free in exchange for a modest amount of work while attending school. Key aspects of the F2CO plan include:
- All eligible students can attend any public college or university (2-year or 4-year) for free for the first two years
- Through a redirection of current federal financial aid funding, the federal government pays tuition for all students, and provides additional performance-based top-up funding for institutions that serve low-income students. We estimate that per-student funding will be higher than the average tuition currently charged by community colleges, and only slightly lower than the average tuition charged by four-year colleges
- Participating institutions cannot charge tuition or additional fees to students
- State funding for higher education will be redirected to cover books and supplies for all students
- Student living expenses will be covered through a state and local stipend equal to fifteen hours a week of living wage employment in the area, federal work-study in an amount equal to fifteen hours a week of living wage employment in the area, and access to federal loans equaling up to five hours a week of living wage employment in the area
We believe that such a policy is long overdue, and will significantly expand the quality, efficiency, and effectiveness of our collective investments in postsecondary education and in a shared and secure future.